HP Strategies to better Serve your Customers

© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Strategies to Better Serve Your Customers ACORD Systems Forum 2012

Mike Brown, HP Insurance Services/ May 16, 2012

© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 2

Insurance industry is traditionally risk averse, but…

Market trends are driving the need for change • Savvy, connected customers do their research

− Expect higher levels of service and more tailored insurance products, look for the best rates

− Demand flexible insurance products

• Competitive pressures to gain market share while reducing costs

− Expand to international markets

• Regulatory and compliance changes require ability to respond quickly

• Non-traditional distribution channels

• Technical advancements (i.e. mobility, social media)


Innovation is key

To be a leader, insurers must: • Use available data to mitigate risk and improve

profitability

• Focus on customer intimacy & trust

• Update business models

• Improve products, introduce new, more targeted products and products for non-traditional customers

• Increase agility to stay competitive

• Find new ways to increase efficiency and reduce costs


Insurance industry trends

Increased pricing sophistication

• Highly granular pricing

• Attract and retain most profitable customers

Celent, “IT Spending in Insurance: A Global Perspective,” March, 2012

Increased use of business intelligence and analytics

• Available data used to mitigate risk, improve profitability

• BI tools to create predictive models for underwriters

Increased use of BPO and SaaS strategies

• Reduce costs

• Access to technology solutions without the cost of infrastructure

Continued rollout of next-generation core systems

• Extend core systems to

additional lines of business

or geographies

Creation of mobile applications

• Consumer and agent mobile apps

• Example: claims applications on smartphones

Aggressive product redevelopment and innovation

• Changing consumer preferences, market performance

• Redesign, re-launch product portfolios


Take advantage of new technologies: Analytics Cloud Model-driven architecture


Organizations not making use of the data they have

0

10

20

30

40

50

60

0 – 25% 26 – 50% 51 – 75% 76 – 100%

What % of the information within your enterprise is unconnected, undiscovered, and

unusable?

0

5

10

15

20

25

30

35

5- Very effective

4 3 2 1 - not at all

effective

How effectively is your organization accessing information to meet legal/compliance and

operational needs? % respondents % respondents

Coleman Parkes study (commissioned by HP), October 2011

35% say they are not effective at accessing business information for compliance/operational needs

34% say that at least half the information in their enterprise is unconnected, undiscovered, and unusable.


Information is power if you know how to use it

Structured data

Information disconnected in silos

Insurer

Renters’

data

data

Life Auto

data

data

data

data

data

data

data

Combine data from multiple sources

From: We know:

Renter’s insurance She lives in a 2BR apartment and she just got married

Auto insurance She drives a Mini

Opportunities :

• Life insurance

• Mortgage

•Homeowner’s Insurance

•Annuity


Unstructured data

0

3000

6000

9000

2005 2010 2015

Structured

Unstructured

Exponential Data Growth

• Data from social media sites, videos, audio files, images, emails, text messages, mobile transactions

Convert to practical, actionable information

• Apply strategically across the ecosystem

• Learn more about customer demographic

• Route to appropriate stakeholders

• Better business decisions

• Better customer service

Exabytes


Better customer experience

The Internet Client/Server

Mobile, Social, Big Data & The Cloud

Database

ERP

CRM

SCM

HCM

HCM

PLM

MRM

Amazon Web Services

OpSource

IBM

GoGrid

Rackspace

Joyent

Hosting.com Tata Communications

Datapipe

PPM

Alterian

Hyland

LimeLight NetDocuments

NetReach

OpenText

PaperHost

Xerox

Google

HP

Microsoft SLI Systems

EMC

IntraLinks

Jive Software

Qvidian

Sage

salesforce.com

SugarCRM

Volusion

Xactly

Zoho

Adobe

Avid

Corel

Microsoft

Paint.NET

Serif

Yahoo

CyberShift

Saba

Softscape

Sonar6

Ariba

Yahoo!

Quadrem

Elemica

Kinaxis

CCC

DCC

SCM

Cost Management

Order Entry

Product Configurator

Bills of Material Engineering

Claim Processing

Inventory

Manufacturing Projects

Quality Control

Business

Education

Entertainment

Games

Lifestyle

Music

Navigation

News

Photo & Video

Productivity

Reference

Social Networking

Sport

Travel

Utilities

every 60 seconds

400,710 ads requests

2000 lyrics played on Tunewiki

1,500 pings sent on PingMe

34,597 people are using Zinio

208,333 minutes Angry Birds played

23,148 apps downloaded

Unisys

Burroughs

Hitachi

NEC Bull

Fijitsu

ADP VirtualEdge

Cornerstone onDemand

CyberShift

Workbrain

Kenexa Saba

Softscape

Sonar6

SuccessFactors

Taleo

Workday

Workscape

Exact Online

FinancialForce.com

Intacct NetSuite

SAP

NetSuite

Plex Systems

Cash Management

Accounts Receivable

Fixed Assets Costing

Billing

Time and Expense

Activity Management

Payroll

Training

Time & Attendance

Rostering Sales tracking &

Marketing

Commissions Service

Data Warehousing

98,000 tweets

Finance

box.net

Facebook

LinkedIn

TripIt

Pinterest

Zynga

Zynga

Baidu

Twitter

Twitter Yammer

Atlassian

Atlassian

MobilieIron SmugMug

SmugMug

Atlassian

Amazon

Amazon iHandy

PingMe

PingMe

Associatedcontent

Flickr

Snapfish

YouTube

Answers.com

Tumblr.

Urban

Scribd.

Pandora

MobileFrame.com

Mixi

CYworld

Qzone

Renren

Xing

Yandex

Yandex

Heroku

RightScale

New Relic

AppFog

Bromium

Splunk

CloudSigma

cloudability

kaggle

nebula

Parse

ScaleXtreme

SolidFire

Zillabyte

dotCloud

BeyondCore

Mozy

Viber

Fring Toggl

MailChimp

Quickbooks

Hootsuite

Foursquare

buzzd

Dragon Diction eBay

SuperCam

UPS Mobile

Fed Ex Mobile

Scanner Pro

DocuSign

HP ePrint

iSchedule

Khan Academy

BrainPOP

myHomework

Cookie Doodle

Ah! Fasion Girl

Mainframe

• Provide the experience your customers want

• Deliver consistent experience while enabling flexibility

• Provide unconstrained, unencumbered access to information

• Services Anywhere 9

New technology access methods change customer expectations


Information Offering in the Cloud

Information Services…

Protect Cloud Services • Archiving • eDiscovery • Electronic Communications

Monitoring & Supervision • ControlPoint • WorkSite • Connected • Policy Authority

Promote Cloud Services • Revenue Optimization • Campaign Optimization • MediaBin • Explore • NewSocial 24x7


Deliver meaningful outcomes across the insurance enterprise

Marketing Risk mgmt. Sales Customer HR, IT Value chain

• Marketing effectiveness

• Targeted advertising

• Social media

• Market targeting and segmentation

• Sales force effectiveness

• Integrated customer experience

• Underwriting analysis

• Feedback analysis

• Product design

• Marketing

• Claims analytics

• Systemic fraud models

• Compliance & risk

• Archiving

• Workforce optimization

• IT performance management


Claims – a good test bed for Connected Intelligence Social data in claims • Use data found on social media in claims process

• Difficult for retail insurance carriers with millions of customers

Fraud analysis • Use advanced techniques to identify fraudulent and potentially fraudulent claims

Fraud scoring • Use automated rules to assess likelihood of fraud based on key indicators from multiple sources

Predictive modeling in claims • Proactive management of claims

• Tune workflows to expected volumes and severity based on predictive estimates.

Claims costs can account for up to 70% of P&C insurers costs

http://www.1stclaims.co.uk/articles/whiplash/car-insurance-premiums.php




• Build & consume right mix of services based on service requirements

• Leverage best of traditional IT, private, managed & public cloud

• Manage & secure hybrid environment to reap value & mitigate risk

“Services Anywhere” with hybrid delivery

Build on-premises cloud services

Consume off-premises services

IT Imperatives

Manage & Secure


15

Hybrid delivery engineered for the agility

Evolving Current State

Disparate Architectures Different Management & Security

Inconsistent Development Environments Increased Complexity

Traditional IT

INFORMATION

APPLICATIONS

INFRASTRUCTURE

Dedicated Physical

Homogenous Inflexible

Future

Common Architecture Converged Management & Security

Open & Standards Based Develop Once, Run Anywhere

Flexibility & Portability

Traditional Managed Cloud

Public Cloud

Private Cloud

APPLICATIONS

INFORMATION

INFRASTRUCTURE

APPLICATIONS

INFORMATION

INFRASTRUCTURE

APPLICATIONS

INFORMATION

INFRASTRUCTURE

APPLICATIONS

INFORMATION

INFRASTRUCTURE

Private Cloud

Traditional

Managed Cloud

Public Cloud

INFORMATION APPLICATIONS

INFRASTRUCTURE

15


Free up resources to focus on innovation

With Cloud delivery • Align infrastructure costs to business volumes

• Take advantage of structural environment already in place without building out own environment

• Security for highly sensitive information

• Different business model for buying applications

• Flexibility to grow or shrink with cyclical nature of insurance business




Why is Model Driven Architecture Important?

Provide more control to the customer

− User interface- control over productivity

− Product development- respond to market needs without vendor support

− Rules and exceptions- control and change corporate standards

• Add incremental value through new releases and upgrades without impact to the customer

• In a multi-tenant public cloud environment, update software without impact to users

• Increase agility and ability to respond to analytics and market drivers


Innovation for the risk-averse

Model-based architecture

Discover and focus on most promising market sectors

• Calculation engine for actuaries for complex product development

• Pre-defined business and calculation models

• No coding

• Discover new ideas, experiment, and validate

Innovate product offerings

Bring new products to market quickly while minimizing risk

• Traditional product development requires coding, testing, system developers

• Configuration over coding

• Use Industry Standards (ACORD,

XML, etc.)

Improve time-to-market

Increase operational efficiency

Enhance customer service


Benefits of Model-Driven Development Approach

• Modeling, not coding • Translate business design into set of modeled

artifacts • Business-driven development through

modeling plus business rules engines

• Greater levels of reuse over traditional systems

• Speed product development to address market and regulatory forces

• 25% - 40% savings in the cost of delivering and maintaining systems

• Maintenance programs offer greater value as ‘black box’ upgrades possible

• Reduce implementation and training costs


“ Investing in new product development and expanding the product catalog are the most difficult things to do in hard times, and also among the most important. “ David Packard (1912-1996) Co-founded HP with William R. Hewlett


Thank you

Technology

HP Strategies to better Serve your Customers